Proving the economics and Technology of Delta V I/O on demand Part 1
Evaluating the impact of electronic marshalling on the project execution process
Vincent Grindlay, Fluor Supply Chain Solutions, explains how Emerson’s CHARMs technology impacts on engineering work practices and project execution, enabling complexity and variability to be reduced, providing cost savings of $2 Million (1.43M Euros) – around 10% of the total automation cost, and reducing project slippage by four months.
The intent of this study was for Fluor and Emerson Process Management to capture, document and present the benefits offered by Emerson’s DeltaV Electronic Marshalling and assess its impact on project execution. The study compared real data from a recently commissioned “traditional” project, with a theoretical project that was identical except for the use of Electronic Marshalling and CHARMs technology. The real project used Emerson’s DeltaV digital control system v10, along with a traditional engineering approach.
The integrated gas project was completed in 2010, and provided an excellent opportunity to look at some real live data. Fluor’s scope was to provide detailed engineering, procurement and construction support services. Emerson’s scope covered 80% of the automation including the Digital Automation System, Safety Instrumented System/Fire & Gas System, Prefabricated Control Building, Prefabricated Field Auxiliary Rooms and Prefabricated Remote Control Buildings.
The traditional way of selecting an automation supplier in a competitive bid environment, is for the Engineering Contractor to develop sufficient information to define the basic automation scope and allow for a technical and commercial evaluation. However, during the process of selection, the Engineering Contractor is moving forward with further design developments. Therefore by the time the automation supplier has been selected, the automation scope has changed – introducing variability. This occurs because the two parties are, in effect, working on different sets of information. To align both the Engineering Contractor and the automation supplier, it is common to introduce a design freeze which allows the systems supplier, in this case Emerson, to ‘catch up’ with the changes that have been incorporated in to the design.
Modification Packs in effect ‘ring-fence’ information in a strategic package specifically for the systems supplier. Modification Packs cover additions, deletions and any other changes from the base scope. As the information is applied, cost and schedule are affected. For example, in this particular project, the effect of the first Modification Pack, which was predominately design development and engineering, was for the project to slip by one month.
A further consideration was the impact of the projects mechanical packages which are notorious for their long lead times. As a consequence, by the time these were understood, the project had moved along again. This new information needed to be shared with the systems supplier, so a second Modification Pack was issued that included all the mechanical package automation information. However, by the time this pack was issued and implemented, there was no slack left in the schedule to allow for hardware and combined tests. These combined tests bring together all the mechanical packages and the automation system. Consequently for this project the impact of the mechanical Modification Pack was to introduce a seven month delay into the schedule.
The benefits of Electronic Marshalling
Using traditional work practices, any change to design requires cabling changes, which in turn requires reworking and rewiring which adds time and cost to the project. Electronic Marshalling removes the need for these physical changes when the design moves – its generic modules provide flexibility and allow the project implementation teams to work more efficiently. Therefore reducing variability and increasing schedule and cost certainty.
On this project, using Emerson’s Electronic Marshalling would have removed the need for the first Modification Pack as the changes required would have been part of normal design development. Also, the changes required by the mechanical Modification Pack would have been greatly simplified – allowing them to be implemented in about half the time.
The flexibility provided in the base scope would mean that both parties are working to the same schedule and the Modification Packs, and all the documentation and costs associated with their production and implementation, would be significantly reduced. Overall there would have been a cost reduction of 80% for Pack 1 and 45% for Pack 2. In addition, these benefits mean that the overall project schedule would slip by just 2 months, rather than 7 months using traditional methods.
So what are the cost implications?
Fluor benchmarked five projects and looked at percentage improvements in installation costs that would be enabled by Electronic Marshalling. These can be summarised as follows:
Installation Materials 15-35%
Cable Tray 22-50%
Installation Labour 3-25%
Engineering, Procurement 45-50%
IO Design 45-70%
Cable Drawings 70%
Loop Drawings 45%
Total Installed Loop Cost 23-34%
Late Change Impact 50-100%
What do these savings represent in real terms? On this particular project, using Electronic Marshalling would enable savings of over US$2 Million (1.43M Euros) – around 10% of automation package, and bring forward delivery of the project by four months. These savings are predominately in the engineering costs and not really in the hardware or software costs. This makes sense as it is the engineering costs which escalate when variability is introduced during project execution.